The shareholder advisory firm flagged uncertainty around the outlook for the Canadian housing market and its possible impact on the country’s banking shares as among the reasons for its recommendation in a note dated May 6.

CIBC raised the cash element of its offer for Chicago-based PrivateBancorp on Thursday in what it called its “best and final offer,” aiming to offset a drop in its share price that had eroded the value of an earlier bid.

ISS had recommended shareholders vote against CIBC’s original offer, made in June 2016, as well as a revision from the Canadian bank in March.

Home Capital Group is facing a run on deposits as confidence in the alternative mortgage lender has fallen following allegations from a securities regulator that executives hid mortgage broker fraud from investors, raising fears as the Canadian housing market is showing signs of price correction after a long boom.

The ISS recommendation came ahead of a vote by PrivateBancorp shareholders on the takeover scheduled for Friday. Both banks reiterated on Monday that the vote would go ahead as planned.

While the potential impact of Home Capital’s problems on Canadian bank stocks is difficult to gauge, ISS said, heightened investor concern would undermine shares in CIBC, which appears to have greater exposure to the residential housing market than its peers.

If you are bullish on rates, regulations, and the economy, here is your chance to vote ‘no’. If not, take what’s in your hand

Meanwhile PrivateBancorp’s shares could receive a boost from a possible overhaul of U.S. tax and banking regulation, the note said.

In a separate report released on Monday, brokerage Stephens said PrivateBancorp shareholders needed to consider how much further value from an improved U.S. banking environment could be added to the bank’s share price after a more than 25 per cent surge since the election of Donald Trump in November.

“If you are bullish on rates, regulations, and the economy, here is your chance to vote ‘no’. If not, take what’s in your hand,” the brokerage said.

CIBC has offered US$27.20 per share, as well as a stock component of 0.4176 of its shares for each of the U.S. bank’s shares, in a takeover offer effectively worth US$60.43 per PrivateBancorp share.